Volume 54, Number 5, September-October 2020
|Page(s)||1401 - 1418|
|Published online||28 July 2020|
A geometric programming approach for a vendor managed inventory of a multiretailer multi-item EPQ model
Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, Tehran, Iran
2 Department of Industrial Engineering, Iran University of Science and Technology (IUST), Tehran, Iran
* Corresponding author: email@example.com
Accepted: 27 May 2019
Due to the uncertain situations of the world, considering inventory management in a stochastic environment gains a lot of interest. In this paper, we propose a multi-item economic production quantity (EPQ) model with a shortage for a single-vendor, multi-retailer supply chain under vendor managed inventory (VMI) policy in a stochastic environment. Three stochastic constraints are developed in the model. Geometric programming (GP) approach is employed to find the optimal solution of the nonlinear stochastic programming problem to minimize the mean-variance of the total inventory cost of the system. Since the problem is in the Signomial form, first, an algorithm is used to convert the model into the standard GP form. The performance of the addressed model and the solving method are evaluated based on computational experiments and sensitivity analysis. A case study in an Iranian furniture supply chain is conducted to show the applicability of the proposed model and 17.78% improvement in terms of total cost is gained.
Mathematics Subject Classification: 97M99
Key words: Supply chain / vendor managed inventory (VMI) / economic production quantity (EPQ) / stochastic programming / geometric programming (GP)
© EDP Sciences, ROADEF, SMAI 2020
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